Eliminating the Confusion around Oracle Licensing in the Cloud

Skytap has partnered with House of Brick Technologies to help educate our customers around Oracle licensing in the cloud and to ensure that they’re not only compliant but also that they’re only paying for items that, in fact, require licensing.

We recently released a new white paper that we highly recommend to anyone with an Oracle contract for on-premises or cloud-based infrastructure.

And to help you begin to eliminate some of the confusion around Oracle licensing and ease fears about remaining compliant, we recently sat down with House of Brick CEO, Nathan Biggs. In the interview below, Nathan explains where this confusion comes from, and where some may find the opportunity to use a “more advantageous license metric” to get the most out of their Oracle investment.

Noel: So, in the whitepaper, it explains that there’s a lot of confusion around Oracle licensing, but that it’s more of a straightforward process than most people believe. So, I was curious as to what is confusing about it and, basically, why shouldn’t it be? What’s so straightforward about it?

House of Brick CEO, Nathan Biggs
House of Brick CEO, Nathan Biggs

Nathan: It shouldn’t be as confusing as it is. Unfortunately, a lot of the confusion comes from Oracle people themselves. We’ll give them the benefit of the doubt that maybe they don’t really understand what’s in the contract. The reason that it is more simple is that your usage of Oracle technology really is based entirely on your agreement with Oracle. So, what you can do and what you can’t do is spelled out very clearly in your agreement with them. So, as long as you stick to that contract, you’re fine. If you start to go outside of the contract, then that’s when you get into trouble.

Noel: One of the early points in the white paper that kind of hit me deals with specifically how Oracle defines a “processor.” The white paper really goes into this nicely, but I just wanted to get a bit of your take here on our blog on why that definition is so important.

Nathan: Well, the reason it’s so important is because Oracle licensing is dependent on the hardware that those software programs run on. The way Oracle defines that hardware in the Oracle contract is by the number of processor cores that are in the particular server where the software is running.

Licensing Oracle in Skytap - White Paper

So, Oracle’s definition states that a “processor shall be defined as all processors where Oracle programs are installed and/or running.” So, it’s a very simple definition. “Installed” is a past tense phrase. “Running” is present tense. So if it has been installed in the past or it is currently running, then you need to accommodate for a license for that Oracle program. If it’s not, then you don’t have to have a license. That means that there’s nothing perspective in this definition of the word “processor.”

There’s nothing that says you might run it in the future and so, you have to pay a license for some future event. It just doesn’t define that in the contract and that’s where some of the misunderstandings comes in, or confusion that customers feel when they try and figure out where they need to have a license.

Noel: This white paper deals specifically with Oracle licensing in the cloud, and even more specifically in the Skytap cloud. I was curious as to what some of those differences are between hardware licensing and cloud computing environments, and maybe how that applies specifically Skytap as opposed to another cloud provider?

Nathan: Sure. Oracle has a policy document that they publish, and in this policy document they state that there are two cloud vendors that are authorized for you to bring your own licenses to cover Oracle software running in those clouds and those two clouds are Microsoft Azure and Amazon AWS. So, those are the only two, other than Oracle’s own cloud, where you can use your existing licenses to cover software running in that cloud environment.

So, for Skytap, because Skytap has not been included in that cloud policy, then a different approach had to be taken to provide a license-compliant environment for Skytap customers. So, what Skytap did is provide a hardware-based license-compliant environment rather than a so-called cloud environment the way Oracle defines it.

So, in the Skytap cloud, there are dedicated servers and dedicated processors where Oracle programs will be running and the Skytap cloud guarantees that those workloads, those Oracle workloads, will not go off of those licensed servers. So, by design and by definition, if you use your Oracle licenses in the Skytap cloud, you will remain compliant.

As far as Oracle would be concerned, if they did an audit, for example, they would not see that it’s running in a cloud environment. We would just report to Oracle in an audit report the servers and the processors where those programs were running. So, that’s how it stays compliant. It’s because it’s a hardware-based solution for Oracle rather than trying to comply with their cloud policy.

Noel: Later on the paper, you talk about development and testing environments, and you mention the potential for, “A more advantageous license metric.” I was curious as to what, for those particular types of environments, what that metric may be for people?

Nathan: So, Oracle’s processor-based licensing, you have to count the number of processor cores and purchase a license for each of those, for the right number of cores that you’re running the software on. For development and test, you don’t have nearly as many users of that environment as you might in a production environment, where you may have thousands or millions of customers accessing the system.

So, in development or test, you might have 10 or 50 or 100 users of the system. In that case, oftentimes it’s advantageous to use what Oracle calls a “Named User Plus” (NUP) metric so that you only buy the number of licenses for the number of users that are using the system. It can be less expensive than the processor metric. A further consideration for reducing costs that we promote to our customers is that because of the virtualization that VMware has that the Skytap cloud is based on, you can now license a single server using the processor metric and run the production workloads on there and also put some development workloads on the same server without paying any additional license at all.

Noel: My last question was for those who download the white paper that we have on both of our sites, or maybe even attend the webinar that we’ve got coming up, what are some of those next steps you can take to begin looking into your own licensing compliance? Where’s a good place to get started with seeing if you’ve got some proactive steps you can take?

Nathan: The first thing that you ought to do is download the white paper and educate yourself on the principles of Oracle licensing and, specifically, how those principles apply in Skytap environments or in your own on-premises environments. After you educate yourself and understand the truth of Oracle licensing, then you need to validate that your infrastructure that you have put together, whether that’s an internal, on-premises infrastructure, or in the Skytap cloud, that it is set up so that the virtual machines running Oracle are staying on licensed servers.  Too many times we see customers that start to virtualize their Oracle workloads but they don’t put the containment in place to keep those virtual machines on licensed hosts and it creates a huge compliance issue.

After you educate yourself, then we highly recommend that you do a review of your architecture to make sure that you’re containing those virtual machines onto licensed servers and you don’t allow them to go outside of that licensed complaint footprint. Then, finally, we recommend customers to look at their own contracts, see what their own entitlement is, compare that to their own usage and get a sense of their compliance if they need to license more or perhaps they have too much and it might be a situation where they can reduce their Oracle expense by cancelling support on certain items that are unused.

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